It’s no wonder unemployed workers are getting discouraged: It’s never taken longer to find a new job.

The unemployment rate fell to 9.7% in January, its lowest level since August. But the duration of unemployment reached an all-time high, according to the Labor Department’s data, which dates back to 1948.

“While there are some positive signs in the jobs report, it’s going to take time for the economy to recover and for hiring to pick up so people can get back to work,” said Christine Riordan, a policy analyst with the National Employment Law Project.

Former Federal Reserve Chairman Alan Greenspan said it is “very difficult” to see U.S. unemployment falling soon and that an economic recovery is “going to be a slow, trudging thing.”

While the recession is “essentially over,” Greenspan said “it’s very difficult to make the case that unemployment is coming down any time soon.”

Job seekers are now out of work for an average of 30.2 weeks, or 7-1/2 months, up from a record high of 29.1 weeks the previous month. In fact, the average duration of unemployment has notched new records for the last 10 months in a row.

With more than six job seekers for every job opening, it’s not surprising that it’s taking that long to find work, said Lawrence Mishel, president of the Economic Policy Institute a research group based in Washington. “It’s a very cruel game of musical chairs.”

Greenspan said he expects unemployment to stay between 9 and 10 percent for most of this year and that. He said the fourth-quarter’s growth rate was helped by inventory rebuilding, suggesting the U.S. economy “shot our ammunition” at the end of 2009. That means economic growth now “doesn’t have the strong momentum I hoped it would have.”

The danger though, is that more job seekers are at risk of seeing their unemployment benefits run out, which generally last up to 26 weeks before federal extensions kick in.

According to NELP’s estimates, 11.5 million Americans are currently collecting some form of unemployment insurance but 1.2 million of those workers will no longer be eligible to collect as of March, when the current federal extensions are set to expire.

Overall, the Labor Department reported a loss of 20,000 in January — much worse than expected. Economists surveyed by Briefing.com had expected a net gain of 15,000 jobs. The economy has lost 8.4 million jobs since the start of the recession in December 2007.

The unemployment rate in the U.S. unexpectedly dropped to 9.7 percent in January, indicating the labor market may be poised to climb out of its deepest slump since World War II.

More than half a million Americans found work, a Labor Department report showed today in Washington, helping push the jobless rate to the lowest since August. A separate survey of employers showed payrolls declined by 20,000 as construction companies and state and local governments cut back.

Manufacturers hired more workers for the first time in three years, expanded hours and boosted pay, which may lift consumer spending and sustain growth. Revisions to previous data increased the number of jobs lost in the recession to 8.4 million, adding impetus to the Obama administration’s push for fresh government measures to boost employment.

Obama will today back a temporary increase in Small Business Administration Loans from $350,000 to $1 million to encourage small business hiring, an administration official said. The president has previously endorsed $33 billion in small business tax cuts and incentives for hiring as well as a plan to use $30 billion of bailout money paid back by Wall Street financial institutions to help community banks make loans to small businesses.

The figure for November was revised higher, however, to show a gain of 64,000 jobs. That was initially reported as a gain of 4,000.

White House adviser Christina Romer said the report was encouraging but also served as a “reminder of how far we still have to go to return the economy to robust health and full employment.”

“Today’s numbers showing continued decline in construction and state and local government employment emphasize the importance of two other of the President’s priorities – continued infrastructure investment and additional aid for strapped state and local governments,” Romer said.

Much of January’s report offers hope that employers are starting to reverse course and may start adding jobs soon. Aside from November’s gain, January’s job losses were the smallest since the recession began and are down from the huge loss of 779,000 jobs in January 2009.

The manufacturing sector added jobs for the first time since January 2007. Its gain of 11,000 jobs was the most since April 2006.

Retailers added 42,100 jobs, the most since November 2007, before the recession began. Temporary help services gained 52,000 jobs, its fourth month of gains. That could signal future hiring, as employers usually hire temp workers before permanent ones.

The average work week increased to 33.3 hours, from 33.2. That indicates employers are increasing hours for their current workers, a step that usually precedes new hiring.

The number of part-time workers who want full-time work, but can’t find it, fell by almost 1 million. That lowered the “underemployment” rate, which also includes discouraged workers, to 16.5 percent from 17.3 percent.

The federal government has begun hiring workers to perform the 2010 census, which added 9,000 jobs. That process could add as many as 1.2 million jobs this year, though they will all be temporary.